1. Global Diamond Industry Essential Charts 2014 Equity Communications www.diamondshades.com

2. www.diamondshades.com/databank Contents Supply 1 Trade 7 Consumption 12 Diamond Prices 16 Long-term Themes 20 Diamond Industry Research Team @ Equity Communications research@diamondshades.com as at 31 August, 2014

3. www.diamondshades.com/databank Contents SupplyPage2013 World Diamond Production Volume12013 Rough Diamond Sales1Rough Diamond Sales Leading Producers 2009-201322013 World Diamond Production Volume - Countries32013 World Diamond Production Value - Countries3World Diamond Production Volume 2004-20134World Diamond Production Value 2004-20134World Diamond Production Volume Forecast 1994-20185World Diamond Production Value Forecast 2004-20185Production Forecast Leading Diamond Producers 2009-20186Production of Polished Diamonds Plus Forecast 1997-20187Value of Polished Diamonds Production 2004-20187TradePageDiamond Trade Turnover8Rough Diamonds Trade Flow Volume 2004-20139Rough Diamonds Trade Flow Value 2004-20139Top Ten Polished Diamond Exporters10Top Ten Polished Diamond Exporters102013 Top Ten Net Importers of Polished Diamonds112013 Top Ten Net Exporters of Polished Diamonds11ConsumptionPage2013 Global Diamond Jewelry Sales12Global Diamond Jewelry Sales 2003-201313Consumption Per Adult Key Consumer Markets 2003-201313Diamond Jewelry Share of Precious Jewelry Sales14Forecast Diamond Jewelry Sales 2006-201615Forecast Distribution of Diamond Jewelry Sales 2006-201615Diamond PricesPageRough Diamond Index16Polished Diamond Index16Rough and Polished Indices Trends17Rough Index Outpaces Polished Index17Precious Jewelry Commodities Prices18

4. - 1 - www.diamondshades.com/databank Supply: 2013 Rough Diamond Production and Sales

5. www.diamondshades.com/databank - 2 - Supply: Rough Diamond Sales Last Five Years

6. www.diamondshades.com/databank - 3 - Supply: 2013 Diamond Production Country Data

7. www.diamondshades.com/databank - 4 - Supply: Rough Diamond Production Last Ten Years

8. www.diamondshades.com/databank - 5 - Supply: Rough Diamond Production Next Five Years

9. www.diamondshades.com/databank - 6 - Supply: Rough Production Next Five Years By Producer

10. www.diamondshades.com/databank - 7 - Supply: Production of Polished Diamonds Plus Forecast

11. www.diamondshades.com/databank - 8 - Trade: Diamond Trade Turnover Last Six Years

12. www.diamondshades.com/databank - 9 - Trade: Flow of Rough Diamond Trade Last Ten Years

13. www.diamondshades.com/databank - 10 - Trade: Flow of Polished Diamond Trade Selected Years

14. www.diamondshades.com/databank - 11 - Trade: Net Flow of Polished Diamonds 2013

15. www.diamondshades.com/databank - 12 - Consumption: 2013 Global Diamond Jewellery Sales

16. www.diamondshades.com/databank - 13 - Consumption: Diamond Jewelry Sales Last Ten Years

17. www.diamondshades.com/databank - 14 - Consumption: Progression of Diamond Jewelry Sales

18. www.diamondshades.com/databank - 15 - Consumption: Diamond Jewelry Sales Next Three Years

19. www.diamondshades.com/databank - 16 - Diamond Prices: Rough Index, Polished Index

20. www.diamondshades.com/databank - 17 - Diamond Prices: Rough Index Versus Polished Index

21. www.diamondshades.com/databank - 18 - Diamond Prices: Precious Jewelry Commodities

22. www.diamondshades.com/databank - 19 - Data Sources Kimberley Process Certification Scheme National Statistics Agencies Company Reports Kitco United Nations Statistics Division (Comtrade) Equity Communications Data Commodities price data updated quarterly. Last update 15 August 2014. All other data is annual data for latest full calendar year - 2013. Forecasts are Equity Communications data reviewed every six months. Last Revision August 31, 2014.

23. www.diamondshades.com/databank - 20 - Key Long-term Themes Driving Supply and Demand for Diamonds Key long-term themes driving diamond supply Global supply of diamonds is mostly a result of the rise and fall of diamond mining operations in response to discovery and exhaustion of diamond deposits, political conflict in key producer and consumer regions, economic crises and changing consumer fashion tastes. No fresh discoveries of rich diamond deposits have been made in more than a decade and this constraints long-term supply of diamonds. Nevertheless, current responsible exploitation of known diamond deposits ensures that diamond producers can provide adequate supply of diamonds for at least twenty years. Our projections do factor in expected consumer demand for diamonds. Many diamonds have been produced in the last twenty yearsbut diamond miners have also added substantially to global reserves of economically exploitable diamond ore. In general, large diamond deposits can be mined for a period of 30 years up to 100 years. Diamond producers often discover additional ore reserves while the mine is in operation and usually extend its life. Furthermore, technological innovation and higher diamond prices often improve economic viability of previously unprofitable parts of a diamond deposit. That being said, global supply of natural color diamonds (pink and yellow colored diamonds, especially) is threatened by the fast-approaching exit of Australia as a major diamond producer. So is global supply of diamonds for fashion jewelry markets. So is India's processing industry.

24. www.diamondshades.com/databank - 21 - Key Long-term Themes Driving Supply and Demand for Diamonds Key long-term themes driving diamond trade Rough Diamonds These are the emerging trends in rough diamond trade: Producer countries in Africa are determined to capture more of the downstream pipeline business. They seek to further increase share of diamonds processed domestically, further reducing supply for foreign-based processors. In the same vein, major diamond producers continue to favor long-term supply agreements over diamond tenders as the best way to receive maximum value for the diamonds they produce. Therefore, diamond processors without the ability to recover costs further down the diamond pipeline will struggle to remain competitive. Dubai is fast emerging as the preferred trading centre for rough diamonds produced in certain African countries because relationships are thought to be less patronizing. However, Dubai's ultimate strength is its favorable environment for diamond traders who dislike tax and intrusive disclosure requirements. Belgium will likely remain the leading marketing destination for diamonds produced in Canada and Russia. Belgium is the closest destination while relationships between Antwerp and diamond producers based in Canada and Russia remain strong. In the final analysis, Southern Africa, Dubai and Antwerp will likely dominate international trade of rough diamonds in the coming years. The trio will specialize in the trading of rough diamonds from their catchment areas. Diamond traders in India seek to establish a formidable rough diamond trading center in the country but we believe this would severely expose the global diamond industry to the whims of the government of India.

25. www.diamondshades.com/databank - 22 - Key Long-term Themes Driving Supply and Demand for Diamonds Polished Diamonds These are the emerging trends in polished diamond trade: Geographical expansion of the global market for diamonds is fuelling international diamond trade. Diamond industry stakeholders have made conscious effort to develop nascent diamond markets since growth opportunities in traditional consumer markets are now limited. For instance, there is current effort to position Panama as a launch pad into South America. Nonetheless, fragmentation and greater internationalization of polished diamonds trade has created a perception of shortages in polished diamond markets. Diamonds have to travel further and further to find the right consumer match. Therefore, with manufacturing profits squeezed, trading activities now routinely provide greater prospects for profit in the diamond pipeline. That being said, these nine territories - USA, India, China, Hong Kong, UAE, Belgium, Israel, UK and Switzerland - will likely continue to dominate trade of polished diamonds as they have done for the past twenty years. Market share of annual flow of polished diamonds will be gained and lost within this group. In the aftermath of the Global Financial Crisis, diamond traders shifted attention to Greater China while traditional markets such as USA recovered from fallout of the crisis. However, diamonds are high-value and low volume consumer goods. Therefore, it is quite easy to be suddenly stuck with an overstocking situation if stock turnover is slower than had been anticipated. Greater China has recently stalled so there is current rotation back into the American market. In general, the diamond industry overwhelmingly follows a push strategy to get diamonds into the hands of consumers. Polished diamonds are marketed at trade shows, placed with retailers on extended credit terms, and moved from one market to another to satisfy seasonal demand. Diamonds are pushed to jewelry retailers with the hope that consumers will buy them.

26. www.diamondshades.com/databank - 23 - Key Long-term Themes Driving Supply and Demand for Diamonds Key long-term themes driving diamond consumption From an economic viewpoint, markets that generate increases in disposable incomes and domestic consumer spending can expect to see growth in diamond jewelry consumption. There is natural pent-up demand for precious jewelry in less developed regions of the world. Therefore, as they become wealthier, most emerging markets should expect growth in consumption of jewelry. Nevertheless, the rise of the Chinese consumer could well mean that it will not be possible to develop and grow new alternative markets for jewelry in future. To be sure, 1.35 billion people going through a period of massive economic transformation raises the stakes for everyone that follows. If we add India and South East Asia into the mix, it is probably accurate to conclude that Asia is the last frontier market for the consumption of precious jewelry and other luxury goods that have finite availability. For one thing, US$1,000 today does not buy you the same quality and quantity of precious jewelry it did just ten years ago. US$1,000 will likely buy even less precious jewelry in ten years time. That being said, the idea of diamond as a gift for the loved one is still the leading driver of the diamond jewelry business. For this reason, the long-term buoyancy of the diamond jewelry business is strongly depended on the number of marriages that occur annually, especially in markets that adopt 'diamond culture'. In fact, sustainability of 'diamond culture' is paramount for the diamond jewelry business. Diamonds as a gift of love was successfully introduced in Japan after America. The diamond industry is now trying to reproduce the same success in India and China. Incidentally, efforts in Europe were much less successful. If the diamond industry successfully introduces diamond engagement ring culture in both India and China, it will be massive for diamond consumption. After all, the number of weddings that occur annually in USA is less than twenty percent the number of weddings that occur in each of India and China in a single year.

27. www.diamondshades.com/databank - 24 - Key Long-term Themes Driving Supply and Demand for Diamonds Nevertheless, current indications are that the diamond industry will likely not succeed in its effort to develop mass 'diamond culture' in China and India. Precious jewelry is consumed in a different way in what we call adornment+investment markets for jewelry. As it happens, diamonds do not have a convincing advantage for appeal in adornment+investment markets. In contrast to gold jewelry, diamond jewelry is bought at retail prices and difficult to trade-in even at wholesale prices. For China, the approaching demographic squeeze is another significant impediment that is difficult to overlook. More than anything, China seems likely to follow the path taken by Japan but too quickly. However, China's huge population does ensure that further economic growth will drive diamond jewelry sales for many more years, particularly for the premier or luxury brand segment. For India, there is potential for massive consumption of diamond jewelry in the country. However, we remain unconvinced that policymakers in the country will let India become a net importer of diamonds. Duties on polished diamond imports and current efforts to disrupt gold imports for domestic consumption suggest that diamond consumption growth is heavily discouraged. Currently, India allows massive imports of rough diamonds because these are re-exported as polished diamonds at higher values. In other words, the trade is foreign-currency positive for the most past. Overall, growth in consumption of diamond jewelry in most emerging markets will be depended on expansion efforts of the world's leading luxury brands. In the final analysis, the USA market will remain the most important market for diamond consumption for many years to come. The country has deeply rooted 'diamond culture' and demographics going forward are more positive than in most advanced economies.

28. www.diamondshades.com/databank - 25 - Key Long-term Themes Driving Supply and Demand for Diamonds Key long-term themes driving diamond prices Rough Diamond Prices On one hand, many diamond producers have deeper operations and lower mining grades to contend with. Equally important, environmental regulations have become tougher for mining operations. Therefore, even in the absence of strong demand growth for diamonds, miners still require high rough diamond prices for sustainable operations and a decent return on investment. Virtually all diamond producers are under pressure to recoup huge capital outlays made to boost production capacity in anticipation of a strong rebound in consumer demand. On the other hand, diamond traders complain about rough diamond prices that rise higher and higher independent of conditions in the downstream diamond pipeline. However, higher rough diamond prices are not by themselves evidence of abuse of market power by producers. On balance, higher rough diamond prices simply represent economic rent due to scarcity. In essence, there are just too many secondary market players chasing a limited supply of rough diamonds. That is not about to change. For the above reasons we have concluded that rough diamond prices are naturally structured to rise over time. Nevertheless, the period starting late 2015 to 2017 should witness restraint in annual growth of rough diamond prices. The major difference from the period 2010-2014 is that diamond producers are expected to increase supply of diamonds by up to 38 percent in the next three years. In the longer-term, the period starting in late 2017 could witness even faster annual growth of rough diamond prices. Essentially, supply growth in the next three years likely means that more diamond traders will be able to access rough diamonds. The supply situation is expected to flatten and then gradually reverse as we approach the 2020s. As it happens, many diamond traders will start to lose access to rough supply and competition could lead to a new round of rapid rough diamond price increases.

29. www.diamondshades.com/databank - 26 - Key Long-term Themes Driving Supply and Demand for Diamonds Polished Diamond Prices Polished diamond prices are primarily influenced by the purchasing power of the world. Polished diamonds are used in the production of jewelry and extravagant luxury gadgets. They have no other use. Since polished diamonds exit the diamond pipeline in retail markets, consumer demand for diamond jewelry and luxury watches ultimately shapes prices of polished diamonds. We forecast continued low single-digit annual growth in the average price of polished diamonds. In general, retailers and manufacturers of diamond jewelry are constrained in their ability to pass on higher costs of rough diamonds to consumers. They are forced to absorb more of the cost increases since jewelry purchases by consumers are price-point sensitive. More important, we believe polished diamond traders will adequately meet demand from jewelry manufacturers and retailers for the near future. Diamond producers are expected to increase supply of rough diamonds in the next three years. By extension, supply of polished diamonds will also increase. For the most past, polished diamond production has been in annual surplus for nearly two decades. According to our calculations, 609 million carats of polished diamonds were produced from 1997 to 2013. This is what we can measure confidently. Of these 609 million carats, we do not know the volume of polished diamonds stored in the diamond pipeline and the volume of polished diamonds bought by consumers. Nonetheless, it would likely require three to four years of zero production to clear global polished diamond stocks in the pipeline. Ultimately, it is actually a good thing for the diamond industry that polished diamond prices rise gradually over time. Indeed, we must never take it for granted that there is minimal recycling of polished diamonds after consumers make purchases. Diamonds are marketed to consumers as symbols of love and devotion. By and large, consumers stick to the program and that is a good thing.

30. www.diamondshades.com/databank - 27 - Key Long-term Themes Driving Supply and Demand for Diamonds If polished diamond prices were to fluctuate wildly for any reason, traders and consumers would immediately have a strong financial incentive to liquidate this large stock of polished diamonds. Moreover, diamonds would no longer be symbols of love; they would quickly become just another avenue for speculators to make money, to the eventual ruin of the whole diamond industry.

31. www.diamondshades.com/databank - 28 - The Big Picture View Ten Years To 2024 If you desire a big picture view, everything that is happening in the diamond industry at this moment points to greater consolidation in the coming years. Right across the industry value chain or pipeline. Current expansion and volatility in the global diamond industry will give birth to long-term stability. Within a decade, we will likely have a leaner but ultimately stronger diamond industry. A few companies will continue to dominate diamond mining; diamond processing will grow in Africa with the transfer of technology and accumulation of processing skills; global processing over-capacity will become a thing of the past after massive shakeout in India; few specialized diamond banks will dominate industry finance, while the world's big banks steer clear of the diamond industry; and retail markets will be dominated by large multinational corporations with strong brands and balance sheets. Fundamentally, the diamond industry will rise in value as has happened with other global industries that have consolidated. In the long run, revenues will increase for everyone who survives the great shakeout. Greater consolidation of retail markets for diamonds is also likely. As diamonds become more expensive, fewer consumers will afford them and fewer companies will have the deep financial resources to maintain stores in poor performing regions. Ten years from now, the big three markets of USA, India and China will likely dominate sales of diamond jewelry. Moreover, retailing of diamonds could consolidate in gateway cities of the world - places like Tokyo, London, Paris, Milan, Mumbai, Shanghai, Dubai, New York, Miami, and Hong Kong etc.

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33. Acknowledgements Global Diamond Business 2014 is based on research by the Diamond Industry Research Team at Equity Communications: Tinashe Takafuma, Romeo Takafuma, Fred Divine and Gerald Manyengavana. Global Diamond Business 2014 is based on information available up to the end of March 2014, for the most part. Please Note The views expressed herein are solely those of Equity Communications as of the date of this report and are subject to change without notice. Data Tables, Survey Results and Financials provided in this report are not intended, nor implied, to be a substitute for the professional advice you would receive from a qualified accountant, attorney or financial advisor. Always seek the advice of an accountant, attorney or financial advisor with any questions you may have regarding the decisions you undertake as a result of reviewing the information contained herein. Nothing in this report should be construed as either investment advice or legal opinion. General Disclaimer This document is produced and circulated for general informational and educational purposes only. It is provided by Equity Communications. Equity Communications research utilizes data and information from public, private and internal sources. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of this publication. The information and analysis contained in this publication has been compiled or arrived at from sources believed to be reliable but Equity Communications does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof. Furthermore, the material contained herewith has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient or organization. It is not to be construed as a solicitation or an offer to buy or sell any commodities, securities or related financial instruments. For more information, please visit http://www.diamondshades.com/ Copyright 2014, Equity Communications Private Limited, ALL RIGHTS RESERVED.